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Nationwide Rent-A-Car Ltd (trading as Avis) v Matang [2023] PGNC 6; N10100 (12 January 2023)

N10100

PAPUA NEW GUINEA
[IN NATIONAL COURTOF JUSTICE]

WS NO. 1272 OF 2019

BETWEEN:
NATIONWIDE RENT-A-CAR LTD t/a AVIS
Plaintiff

AND
ALPHONES MATANG
First Defendant

AND
JOSEPH LELANG, MP
Second Defendant

AND
THE NATIONAL PARLIAMENT OF PAPUA NEW GUINEA
Third Defendant

Lae: Dowa J
2021: 18^th October
2023: 12^th January

CONTRACT - BREACH OF CAR RENTAL AGREEMENT—First defendant breaching terms of rental agreement by pleading guilty to negligent driving- assessment of damages-loss based on pre accident value.

VICARIOUS LIABILITY- Whether second and third defendants vicariously liable-where pleadings fail to disclose the capacity and basis for vicarious liability - Judgment against the first defendant only.

Cases Cited
Enaia Lanyat v State (1996) N1481
Jonathan Mangope Paraia v The State (1995) N1343
Obed Lalip v Fred Sekiot and The State – N1457
Peter Wanis v Fred Sikiot and The State (N1350)
Porgera Joint Venture -v- Robin Kami (2010) SC1060
Samot v Yame (2020) N8266
Tirima -v- Angau Memorial Hospital Board (2005) N2779
Yooken Paklin v The State (2001) N2212

Counsel:
Mr S. Endehipa, for the Plaintiff
T. Berem, for the Defendants

JUDGMENT

12^th January, 2023

1. DOWA J. The Plaintiff claims K55,000 being the pre accident value of its motor vehicle which was damaged in a road accident during hire by the defendants.

Facts

2. The Plaintiff is the registered owner of a motor vehicle, Toyota land cruiser, Reg. No. LBM 507. On 9^th April 2019 the Plaintiff hired its vehicle to the first defendant out of their Lae office under a rental agreement. The vehicle got involved in a road accident, the next day, 10^th April 2019 at the inter-junction of Kwila Road and Kasia Crescent, Lae City, Morobe Province. The plaintiff’s motor vehicle was extensively damaged in the accident. Following the accident, the first defendant was arrested and charged with driving without due care and attention pursuant to Section 17 (2) of the Motor Traffic Act. He pleaded guilty and was convicted and fined K300.

3. The Plaintiff alleges that the first defendant breached the terms of the Rental Agreement: a) by being negligent in his driving causing an accident. b) by admitting liability or pleading guilty to the charge of driving without due care and attention.

4. The Plaintiff alleges, because of the accident and admission of liability, it suffered loss of the vehicle and claims K55,000 being the pre-accident value of the motor vehicle.

Defence
5. The First and Second Defendants filed a Defence denying the claim on the basis that: a) the First Defendant did not read and understand the terms of the Rental Agreement: b) the second and third defendants are not vicariously liable and c) the Plaintiffs loss can be settled by its insurer.

Trial

6. By consent of the parties, the trial was conducted by affidavits. The parties agreed to rely on all the affidavits filed in the proceeding. The parties also agreed to rely on written submissions.

Evidence

7. The Plaintiff relies on the following affidavits:

1. Affidavit in Support of Kaia Maino sworn on 16^th November 2020 and filed on 19^th November 2019 – doc.7.
2. Affidavit in Support of Mariane Kamesh sworn on 17^th November 2020 and filed on 19^th November 2020 – doc 8.
3. Affidavit In Support of George Buka sworn on 15^th December 2020 and filed on 21^st December 2020 – doc.10.
4. Affidavit In Response to Affidavit of Alphonse Matang of Allison Gawi sworn on 18^th March 2021 and filed on 19^th March 2021 – doc 23.
5. Affidavit In Response to affidavit of Alphonse Matang of Kaia Maino sworn on 18^th March 2021 and filed on 19^th March – doc. 24.
6. Amended Affidavit in Response to Affidavit of Alphonse Matang of Kaia Maino sworn on 19^th March 2021 and filed on 1^st April 2021 – doc. 26.

7. Affidavit in Response to Affidavit of Simon Mangai of Allison Gawi sworn on 11^th May 2021 and filed on 19^th May 2021 – doc 28.

8. The Defendants rely on the following affidavits:

(1) Affidavit of Alphonse Matang sworn on 12^th February 2021 and filed on 17^th February 2021 – doc.16.

(2) Affidavit of Simon Mangai sworn on 18^th February 201 and filed on 29^th March 2021 – doc 25.

Issues

9. The issues for consideration are:

1. whether the first defendant is liable to the Plaintiff.
2. If so, what damages is the Plaintiff entitled to

100. Whether the second and third Defendants are vicariously liable.
     

Consideration of the Issues

1. Is the first defendant liable to the Plaintiff
   

10. I have studied evidence of the parties carefully. The undisputed evidentiary facts are these: The Plaintiff is the registered owner of the Motor vehicle, a Toyota Land Cruiser, 10-seater, Reg No. LBM 507. The vehicle was hired out to the first defendant on 9^th April 2019 under a standard Rental Agreement. The First Defendant signed the Rental Agreement before taking delivery of the vehicle. Next day, 10^th April 2019, the Plaintiffs Motor vehicle got involved in a road accident in the city of Lae, Morobe Province. The first defendant was driving the plaintiff’s vehicle at the time of the accident. As a result of the accident the motor vehicle sustained extensive damage and was assessed beyond economic repair. The first defendant was then charged with driving without due care and attention under section 17 (2) of the Motor Traffic Act. He pleaded guilty and was fined K300.00.

11. Did the First Defendant breach the terms of the rental agreement by pleading guilty to the traffic offence. Is the first Defendant liable for the plaintiff’s loss? Mr. Endephipa, counsel for the plaintiff, submits that the first defendant is liable for the plaintiff’s loss for two reasons: (1) for driving the vehicle negligently, and (2) for pleading guilty to the charge (admitting liability) which is a breach of clauses 9 and 13 of the Car Rental Agreement.

12. In response, Mr. Berem, submits that the Plaintiff is primarily in the business of car rental, and accidents and losses are the natural part of its business, and such losses should be taken care of by the Plaintiff’s insurer rather than the hirer. He submits that the Plaintiff has not been forthright in its insurance arrangements which amounts to double dipping. That the First Defendant did not read and understand the terms of the Rental Agreement.

13. The terms of the rental agreement are clear. The first defendant gave a legal undertaking that in case of accident, he will not readily plead guilty and admit liability. In the present case the first defendant admitted that he was not concentrating in his driving when he got involved in a collision with another oncoming motor vehicle. He pleaded guilty to a traffic offence of driving without due care and attention and was convicted and fined K 300.00. The first defendant’s actions clearly breached clauses 9 and 13 of the rental agreement.

14. It is my view that claims for loss under an insurance undertaking is a private contractual relation between the Plaintiff and the insurer. The Plaintiff’s complaint, as I understand, is that the actions of the first defendant has jeopardized its chances of making a claim with its insurers by the first defendant’s guilty plea. The defendant’s liability is a primary liability to the plaintiff in the first instance. Double dipping maybe raised if there was evidence of the Plaintiff’s loss being settled by its insurer. Even then, the first defendant won’t be totally absolved from liability as the insurer could still seek reimbursement from the defendants under the principles of subrogation if the insurer wants to institute recovery proceedings from the primary tortfeasor.

15. It is therefore my finding that the first defendant breached the terms of the Rental Agreement by driving the Plaintiffs motor vehicle negligently, and subsequently pleading guilty to the charge of driving without due care and attention which is tantamount to admitting liability. By admitting liability, it has jeopardized the Plaintiffs chances of making a claim with its insurers. Whether the first defendant understood the terms of the rental agreement or not and whether an insurance policy is available to cover the loss, is of no consequence to the First Defendant’s liability.

16. In the end, I find the Plaintiff has established liability on the balance of probability against the First defendant.

2. Damages; how much is the Plaintiff entitled to.
   

17. Whilst the issue of liability is settled, the Plaintiff is still required to prove damages with credible evidence. Ref: Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State (N1350), Enaia Lanyat v State (1996) N1481; Obed Lalip v Fred Sekiot and The State – N1457; Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

18. In Samot v Yame (Supra), His Honour, David J referring to legal principles to be applied in assessing damages said this at paragraph 46 of his judgment:

“The Supreme Court in William Mel v Coleman Pakalia (2005) SC790 and the National Court decision of Cannings, J in Steven Naki v AGC (Pacific) Ltd (2006) N5015 summarise or identify a number of legal principles that are applicable in assessing damages where liability is established either following a trial or after the entry of default judgment and these are:

• The plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)
  
• Corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, National Court, Woods J; Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, National Court, Lenalia J.)
  
• The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. (Peter Wanis v Fred Sikiot and The State (1995) N1350, National Court, Woods J.)
  
• The same principles apply after default judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a default judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence. (Yange Lagan and Others v The State (1995) N1369, National Court, Injia J.)
  
• If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457, National Court, Injia J.)
  
• Where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded. (MVIT v Tabanto [1995] PNGLR 214, Supreme Court, Kapi DCJ, Hinchliffe J, Sevua J; Waima v MVIT [1992] PNGLR 254, National Court, Woods J; MVIT v Pupune [1993] PNGLR 370, Supreme Court, Kapi DCJ, Jalina J, Doherty J; Tabie Mathias Koim and 28 Others v The State and Others [1998] PNGLR 247, National Court, Injia J.)
  
• The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages. Where precise evidence is available the court expects to have it. However, where it is not, the Court must do the best it can. (Jonathan Mangope Paraia v The State (1995) N1343, National Court, Injia J.)
  
• The court must be alert to vague claims, unsupported by corroborating evidence, as they might be false claims. The court must only uphold genuine claims. (Kolaip Palapi and Others v Sergeant Poko and Others (2001) N2274, National Court, Jalina J.)
  
• The person who has been wronged has a duty to mitigate their losses; though it is the defendant who has the onus of proving failure to mitigate (Dia Kopio v Employment Authority of Enga and Others (1999) N1865, National Court, Hinchliffe J; Coecon v National Fisheries Authority (2002) N2182, National Court, Kandakasi J.)”

19. I will adopt and apply these principles in the present case when considering each head of damages sought by the plaintiff.

Damages
20. How much in terms of damages is the Plaintiff entitled to? The Plaintiff claims the sum of K 55,000.00 in the statement of claim for the loss of the vehicle. The claim for K 55,000.00 is based on the pre accident value of the vehicle.

21. There is evidence from Ela Motors and PNG Motors that the plaintiff’s motor vehicle was damaged beyond economic repairs. The repair assessments are done by two most reputable motor dealers, and I accept them as credible. As to the pre accident value, I note the assessment was done by Ela Motors, the motor dealer of Toyota brand. The vehicle was about 5 years old and commuted 130,000 kilometres and was in good condition. The assessment done by the motor dealer is reasonable and I accept same. I will therefore award the full sum of K 55,000.00 claimed.

Interest

22. The plaintiff claims 2% interest. The suggested rate is reasonable, and I award same. Interest calculated from the date of these proceedings to the date of judgment (1,189 days) amounts to K 3,583.29. The total judgment inclusive of interest shall be K 58.583.29.

(c) Are the Second and Third Defendants vicariously liable to the Plaintiff.

23. Vicarious Liability is a common law principle by which one legal person is held liable for the acts or omissions of another person or group of persons over whom the first person has control or responsibility. Refer Tirima -v- Angau Memorial Hospital Board (2005) N2779.

24. In the present case, Mr Endephipa submits, the first defendant works for Kandrian District Administration as the Coordinator for the Kandrian District Scholarship Scheme. Therefore, the Second Defendant in his capacity as the Member of the Kandrian -Gloucester Electorate and the third defendant, National Parliament of Papua New Guinea are vicariously liable.

25. Mr. Berem submits that the Plaintiff failed to plead the proper capacity under which the Second and Third Defendants are sued, and the basis of vicarious liability to be held against the Second and Third defendants for the conduct of the First Defendant.

26. I agree with the submissions of Mr Berem. There is no pleading and evidence that the First Defendant is an employee of the Second and Third Defendants. The pleadings and evidence show, the first Defendant was engaged as Coordinator for Kandrian District Scholarship Scheme. That would mean he was working for Kandrian Gloucester District Development Authority, a state entity established under the District Development Authority Act 2014. Section 4 of the District Development Authority Act provides “a District Development Authority -(a) is a body corporate with perpetual succession; and(b) is to have a seal; and c) may acquire, hold and dispose of real and personal property; and(d) may sue and be sued in its corporate name.” In my view Kandrian Gloucester Development Authority is the correct State entity to be sued. I observe from the pleadings and evidence that, it was brought to the attention of the Plaintiff that the First Defendant was engaged by Kandrian District Administration. The Plaintiff could have amended his pleadings to include Kandrian Development Authority as a party rather than the Second and Third Defendants. He did not do that, and he is now bound by his pleadings.

28. For these reasons, I am not convinced that the Second and Third Defendants are vicariously liable for the conduct and actions of the first defendant.

Cost

29. An order for cost is discretionary. The Plaintiff has succeeded in its claim against the First Defendant and is entitled to cost against the First Defendant only. The second and third defendants have asked for cost of defending the proceedings. The third defendant did not fully participate in the proceedings. The second defendant was in a responsible position to encourage settlement. He is the Chairman of Kandrian Development Authority and should have stepped in to assist the first defendant who was carrying out the district’s development agenda. For these reasons, in the exercise of my discretion, no award for cost shall be made in favour of the second and third defendants.

ORDERS

30. The Court orders that:

1. Judgment be entered for the Plaintiff in the sum of K58,583.29 inclusive of interest.
   
2. The First Defendant shall pay the judgment debt.
   
3. The First Defendant shall pay the cost of the proceedings to be taxed, if not agreed.
   
4. Time be abridged.

_________________________________________________________________
Sampson Endehipa & Co: Lawyers for the Plaintiff
Berem Lawyers: Lawyers for the Defendants